Jim Armitage: If G4S is lucky, tagging payout could be the end of an extended nightmare

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Outlook G4S's share price should have bounced back more than it did.

Having dropped an opening bell clanger yesterday morning with the announcement of a £170m loss, G4S went on after lunch to announce a deal with the Ministry of Justice to compensate us taxpayers for security tagging dead people (or at least, billing us for tagging them).

The compo number was big – £108.9m, compared with Serco's £68.5m bill for similar offences last year. Perhaps that scared investors, explaining the shares finishing down 5%. But the positive significance was bigger than the market credited.

Barring yet another scandal, this could be a turning point for Britain's least popular company. For Serco, a similar settlement paved the way for it to come off the state contracts blacklist, allowing it to bid for new tenders. There is little reason to think G4S can't go down the same route.

Sure, there are still risks. G4S has to convince the Cabinet Office that it's carried out the Clockwork Orange "corporate renewal" process like Serco did. Criminal investigations are still ongoing into the tagging and court prisoner escort contracts, and there's always the chance that another huge scandal will emerge in another corner of this vast empire.

However, given that the Serious Fraud Office does not have the most convincing record of prosecuting big businesses, and considering the difficulty of obtaining a criminal level of proof in any alleged white-collar crime, one has to wonder how likely a conviction really is.

Labour says the Government must not allow G4S to bid on any more UK state contracts until the SFO probe is complete. With an election looming, those calls may become more shrill. Neither G4S nor Serco will get a look in for the forthcoming probation service privatisation - that would show unseemly haste - but that is only one, albeit extremely juicy, set of tenders.

Like it or not, and in most cases, we should not, outsourcing of public sector work is only ever going to increase. G4S won plenty of contracts under both the Labour and Coalition governments. It will soon be doing so again. Probation doesn't last forever.